Business owners must carry different types of insurance in different states. Small business insurance in Arizona is for the protection of businesses, consumers, and employees. While the laws concerning workers comp insurance vary by state, small business insurance in Arizona requires any company that regularly employs at least one person to carry workers’ compensation insurance coverage.

Workers Comp in Arizona: What Small Business Owners Should Know

It can be a little confusing, especially if you aren’t familiar with Arizona state laws regarding workers comp insurance coverage. Here’s what small business owners should know.

Arizona Workplace Accident Stats

The Bureau of Labor Statistics reports over 57,000 tragic and costly workplace accidents in the state of Arizona in 2021. It is terribly unfortunate when an employee suffers an on-the-job injury while trying to earn a living. Not only does it interrupt their lives, but they sometimes endure suffering that could have been avoided.

Paying for an employee’s on-the-job injury can devastate a small business that may not have access to a lot of capital. Carrying workers comp insurance helps protect the business while ensuring that any employee injured on the job gets the immediate medical attention necessary for their injury. It also helps ensure that the business is in compliance with both state and local laws regarding workers comp insurance.

Who needs workers’ comp insurance in Arizona?

Any business with one or more employees is required to carry workers comp insurance in the state of Arizona. There are some exceptions to this rule depending on the industry your business is in. For instance, farm workers and domestic workers do not require workers comp insurance.

Independent contractors are also not required to carry workers comp insurance by state law. However, some clients do require proof of workers comp coverage before doing business. This is typically the case with builders who work with subcontractors. State law does not require subcontractors to carry workers comp insurance but the builders who work with them may require it before providing work.

Small business insurance Arizona laws state that business owners, executives, and partners can opt out of workers comp coverage if they desire. Sometimes people opt out of coverage to lower premiums while other times they may not feel that they need to be covered. Business owners, partners, and executives often have adequate medical coverage to opt out of workers comp coverage.

What does worker comp cover in Arizona?

Workers’ compensation coverage is for the protection of employees and business owners. It protects business owners from costly lawsuits due to an on-the-job injury or fatality and helps ensure that the injured employee gets immediate medical attention. It also helps encourage employers to provide a safe work environment to mitigate the risk of injury.

Worker’s compensation insurance pays for different things in different states so the coverage can vary. In the state of Arizona, worker’s compensation insurance covers the cost of all medical treatments related to an on-the-job injury. It also covers temporary or permanent disability benefits if the disability was caused by an injury the employee received while on the job.

The idea is to ensure the injured employee gets immediate and adequate medical care while allowing them ample time to completely heal from their injury. Workers’ compensation insurance in Arizona will replace a portion of the employee’s lost wages while they are recovering. The portion paid in the state of Arizona is 66 percent of the employee’s average monthly wage.

Where to Purchase Arizona Workers Comp Insurance

Small business insurance in Arizona gives business owners multiple options for purchasing workers’ compensation insurance. They can purchase workers comp insurance from private insurers, like Cerity. This gives small business owners the opportunity to shop, comparing rates and coverage to find the best option for their business.

Arizona business owners can also choose to purchase workers comp insurance from the state competitive fund. Business owners who have an annual payroll of $2 million and meet other requirements can also apply for self-insurance through the Industrial Commission of Arizona.

Small Business Insurance Arizona

Running a business is hard and small business insurance in Arizona can be confusing, especially if you’re constantly busy. If you own a business in Arizona and have even a single employee, it is likely that you may need to carry workers’ compensation insurance. You may also need to carry workers comp insurance if you are a subcontractor looking for work.

If you aren’t sure where to start, a private insurance company will likely give you a free quote. If you happen to have some other type of small business insurance in Arizona, then your agent may be able to advise you on the laws of the state and possibly give you a quote on workers’ comp insurance. The main thing is that your business and your employees are protected from the tragedy of an on-the-job injury.